CYBERSECURITY

In the 2014-2015 Annual Cybercrime Report, the Philippine National Police (PNP) Anti-Cybercrime Group notes that there were 614 incidents reported. Twenty-two percent were internet frauds or scams, while 10% involved violations of the E-Commerce Act and R.A. 8484 or the Access Devices Regulation Act (ATM and credit card fraud).

With the enactment of the Cybercrime Law, the PNP, National Bureau of Investigation (NBI), and Department of Justice (DOJ) were given mandates and directions on dealing with cybercrime cases. However, for most cybercrime victims, the lack of an online process for cybercrime reporting and legal assistance make it difficult to file reports and sustain their complaints. This is especially so when service providers based abroad cannot provide the required supporting evidence.

DATA PRIVACY

Republic Act No. 10173 or the Data Privacy Law was enacted in 2012 with the intention of protecting personal information (including sensitive personal information) of Filipinos. The Privacy Commissioner will first have to be appointed before the Implementing Rules and Regulations (IRR) can be issued. The self-executing provisions of the law, however, are now in effect.

While waiting for the establishment of the National Privacy Commission, the private sector is urging the DTI, given its mandate under the E-Commerce Law, to update the data privacy guidelines issued in 2006 to align it with the Data Privacy Law. It is important for citizens and businesses to have an avenue for complaints to be filed in violation of the Data Privacy Law.

CONSUMER PROTECTION ONLINE

The private sector notes that there is a need for the DTI to issue new policies adjusting to trends happening online. This includes online sales permit approvals where its current 30-day rule may be too long. In addition, there is a need for this service to start accepting applications online.

Consumer complaints require parties to appear in person at the DTI office. However, there are cases where the buyer and seller may come from different provinces and this will be difficult to implement. Hence the need for an online dispute resolution process.

On 20 October 2008, the DTI, Department of Health, and Department of Agriculture enacted a joint memorandum circular on consumer protection for e-commerce transactions. (DTI-DOH-DA Joint Administrative Order (AO) No. 1 - “Rules and Regulations for Consumer Protection in a Transaction Covered by the Consumer Act of the Philippines (R.A. 7394) through Electronic Means under the E-commerce Act (R.A. 8792)” or the E-Consumer Protection Guidelines).

Part of the guidelines include mandating minimum requirements that e-commerce sites must comply with, e.g., privacy policy, information about retailer, seller, distributor, products and services, and consumer transaction, including the setting-up of a help desk to internally resolve consumer complaints.

This lack of an established online process for handling of merchant and consumer complaints affects confidence in doing e-commerce.

The DTI is encouraged to set up a single platform for complaints-handling, including an application that can route the complaint to the concerned government entity and monitor the complaints until its resolution.

The DTI is working with Congress (Senate and House of Representatives) to amend the Consumer Act of the Philippines that will include e-commerce-related provisions.

Trust is essential for e-commerce to prosper. There is a seeming lack of seal providers to authenticate e-commerce sites offering products and services online.

LOGISTICS

Logistics remain to be a major pain point for e-commerce players in the Philippine market. Existing burdensome and complicated Customs processes have been the subject of a lot of complaints even for low-value shipments.

The issue that has been commonly raised is the lack of awareness on Customs taxes and duties resulting to confusion among those who buy online from international sites and for those who ship local products to international buyers.

Various import permit documents remain to be mostly paper-based or still not done electronically requiring a Filipino buyer or seller to personally visit each of the relevant government agencies to file the permit and await its approval. For instance, the National Single Window, which is a very important e-commerce application, has yet to be fully implemented. It is critical that we fully implement this soon to enable our country to participate in the ASEAN Single Window and to prepare our stakeholders for cross-border e-commerce.

On the distribution side, the provision of reliable courier services, particularly in the countryside, continues to be a major problem. This is compounded by the fact that some buyers cannot provide their exact address due to absence of a geocoding system in some of the rural areas in the Philippines.

In order to address this issue, some online merchants have resorted to delivery of items using motorcycles and even bicycles just to penetrate the rural areas.

The BIR issued Revenue Memorandum Order (RMO) 21-2000 prescribing the policies and procedures in the processing and approval of taxpayer’s Application for Permit to Adopt Computerized Accounting System (CAS) and its components as amended by RMO 29-2002.

RMO No. 21-2000 specifies the components in the preparation of “1) general journal, general ledger, and other subsidiary records; 2) sales, purchases, accounts receivable, accounts payable, inventory, payroll, ledgers and other accounting records; 3) generation of official accounting documents such as official receipts (OR), sales and cash invoices, cash vouchers, journal vouchers, billing statements, sales tickets, etc.; and 4) generation of reports as required by the BIR.“

In August 2013, BIR issued Revenue Memorandum Circular (RMC) 55-2013 to reiterate a taxpayer’s obligations in relation to online business transactions. The taxation rules and guidelines on non-online transactions are similar to online transactions.

Despite these regulations, online sellers and freelancers find it difficult to comply with the requirements since the guidelines for the issuance of official receipts online is not clear. Creating a system or application and having it approved by the BIR may take too much time and resources for each merchant to work on.There is a demand for easily accessible, usable invoicing and official receipt tools for use by freelancers, online direct sellers, and small e-commerce sites online.